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prevented LII from obtaining additional financing from commercial
lenders.
2. Transit
Transit had no loans from unrelated lenders during the years
in issue.
3. LWSI
During the years in issue, LWSI had a $20-$25 million
revolving loan agreement with RBC (Portland, Oregon branch).
On November 14, 1986, LWSI and LWSL agreed to a joint
revolving loan from RBC, which combined their existing credit
agreements and increased the credit line to $140 million and
later to $240 million.
LWSI's loan agreements with RBC included conventional
covenants, representations, warranties, and security provisions.
LII guaranteed the RBC loans to LWSI. RBC required LII to have a
total debt to equity ratio of no greater than 2 to 1 and a
working capital ratio (current assets over current liabilities)
of no less than 1 to 1.
4. Tree
Before LTI acquired Tree's stock, Tree (then Monroe) had a
term credit agreement with Chase for $3 to $5.5 million. The
terms of Tree's loan agreement with Chase were considerably less
favorable than those with LIIBV. Tree's loan agreement with
Chase included conventional covenants, representations,
warranties, and security provisions. Chase secured the loan to
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